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I have an MTH I Tad with a protruding  extension to place under the track to activate it, but it also has  an auxiliary power outlet. The protruded extension is a few inches and requires the device to be placed back from the track and looks out of place. I  can just cut a place out of the track bed and insert the extension there, or preferably, cut off the extension and rely only on auxiliary power. If I do cot off the extension, will it impede the operation of the I Tad using only auxiliary power? 

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... If I do cot off the extension, will it impede the operation of the I Tad using only auxiliary power?

No.  When you flip the rocker switch to Aux Power, the two contacts on the extension (which go to center and outer rail) are taken out of the circuit and have no effect on the ITAD operation.

I did a teardown of the Realtrax ITAD in this OGR thread.  It's more information than you need but if you are comfortable reading a schematic, in the upper left you can see the Rocker Switch selects whether the ITAD gets its power from the 2 Aux Input terminalsor the 2 extension prongs (or whateveer you call them!) via the yellow/green wires in the photo below:

IMG_2964

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